China has options: The U.S. may be more dependent on trade with Asia than President Trump realizes

• In the CEO today: Nicholas Gordon, luckAsia Editor, on how the United States relies on trade with Asia, which is aware of President Trump.
• The big story: Federal Reserve Chairman Jerome Powell warns that Trump’s tariff can lead to “higher enlargement and slower growth.”
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• Analyst notes From jpmorgan on the budget, Widbush on NVIDIA, Apollo on the recession, and UBS in the trade war.
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Good morning. The “Liberation Day” tariff in Trump has not spared any country: the allies of the United States, the emerging markets, and even those countries that run a commercial deficit with the United States. China has received a lot of attention. But dug deeper and you will find a mixture of confusion and disappointment between our allies.

Japanese Prime Minister Shigro Ishiba talks about the need to understand “emotional elements” behind Trump’s views of trade. Australia detonates definitions as “baseless in logic” because some of its exporters increase trade with China. Lawrence Wong, Prime Minister of Singapore – perhaps the country that benefits more than free trade – is now warning of a “more arbitrary, pregnant and dangerous” world. Here are three things that we can expect to see from Asia because this trade war plays it.

China has options. The White House argues that China needs a giant consumer market in the United States more than the United States needs cheap Chinese manufacturing. But the opposite is likely to be true. American retailers and American manufacturers depend on Chinese supply chains (and therefore, Asian). The sharp tariffs by 145 % means a huge increase in prices for American consumers and increased costs of manufacturers in the United States. China will harm the loss of the American market, but Beijing is likely to bet that Trump will be hurt more. They may be right: Trump exempted smartphones, laptops and other electronics from most of the China tariffs.

Asian countries may start working closely. Even while Asian leaders fly feverish to Washington to start trade negotiations, they started building relationships with each other. Malaysian Prime Minister Anwar Ibrahim calls for ASEAN to take a unified front in trade negotiations with the United States Xi Jinping in the middle of a three -country tour in Southeast Asia. China, Japan and South Korea are talking about promoting trade. New Zealand calls for a new bases -based commercial bloc. Europe, too, communicates initially with China. Southeast Asia may now move towards “greater economic integration that has long been highlighted, but he was not enthusiastic about swimming hard towards him.”

Next chapter – because the United States looks unreliable. Many countries in Asia have installed their hopes on open and stable openings: it has managed the third largest trade surplus with the United States last year, behind China and Mexico, and depends on US exports for 30 % of GDP. Betting on the United States to be reasonable is a sure thing after after April 2. Even if Vietnam can get a deal, what is the evidence that Washington will adhere to it? China’s narration has also changed. For years, the Chinese economy was declining, and its markets were inaccurate, and its diplomat “Wolf Warrior” undermined foreign policy. Now, China appears to be attached to the main sectors such as EVS and AI. It looks like a stronghold of stability in the light of the United States policy. Many countries prefer not to choose between the United States and China. But if they are forced, they may not choose Washington.

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Call the executive daily via Diane Brady at Diane.brady@fortune.com

This story was originally shown on Fortune.com